CP-35,587 {6-[d-2-amino-2-(p-hydroxyphenyl)acetamido]-2,2-dimethyl-3- (5-tetrazolyl)-penam} is a member of a new family of beta-lactam antibacterial agents. Because the biospectrum of CP-35,587 has features similar to both penicillins and cephalosporins, experiments were carried out to explore its mode of action. CP-35,587 did not inhibit peptidoglycan transpeptidase from Escherichia coli, but it did inhibit dd-carboxypeptidase. Similar results were obtained with cephalexin. When these antibiotics were compared for effects on growth and morphology of E. coli, it was observed that filaments formed after exposure to either antibacterial agent for 30 to 60 min. The filaments enlarged, and fragmentation occurred until very few viable cells remained after exposure to CP-35,587. After 180 min in the presence of cephalexin, the cells began to divide, and the filaments formed cross-walls reaching control values in 24 h. CP-35,587 and cephalexin had similar effects on the morphology of the Klebsiella cell: the cells became enlarged within 30 min; with increasing exposure, the filaments became longer, with evidence of cytoplasmic emptying and ghost cell formation. These ghostlike tubules eventually broke apart, leaving fragments. These data indicate differences in the mode of action of CP-35,587 from those of most other beta-lactam antibiotics.